MASSACHUSETTS

Massachusetts Governor Paul Cellucci signed the nation’s first community choice legislation in 1997. Massachusetts is also home to the country’s oldest municipal energy aggregator (MEA), the Cape Light Compact, which also launched in 1997.

HISTORY

In late 1994 State Senator Mark Montigny (D-New Bedford), co-chair of the Joint Committee on Energy, introduced a Competitive Franchise bill (S.447, 1995) to allow local governments to create “Consumer Service Districts” that would procure electricity for their residents using a competitive bidding process. His bill was based on concepts that were the brainchild of CCA pioneer Paul Fenn. After nearly three years of debate and revision, the Utility Restructuring Act of 1997 was signed into law.

MEAs in Massachusetts are initiated by municipal elected bodies. Aggregation programs must be developed in consultation with the Department of Energy Resources and approved by the Department of Public Utilities. As in other states outside California, most of the Commonwealth’s aggregators focus on rate savings rather than environmental benefits.

Commonwealth law prohibits a profit mark-up on the energy supply portion of utility services. As a result, Massachusetts electric utilities have not opposed MEA formation.

According to the Metropolitan Area Planning Council, MEAs offer three tangible benefits to communities besides less expensive electricity.

A municipality can choose to receive a fee from the supplier that can be dedicated to funding energy efficiency or renewable projects, such as the purchase and installation of high-efficiency streetlights or solar photovoltaic panels.

If a municipality chooses to collect the Systems Benefit Charge for energy efficiency (0.25 cents/kWh), it will gain control of the funds to run its own energy efficiency programs. To date, only the Cape Light Compact has done so.

Communities with MEA can easily obtain data on residents’ aggregate energy use, which is useful for energy efficiency and climate change planning purposes. Communities without MEA find it difficult to acquire such data from investor owned utilities.

CURRENT AND EMERGING ISSUES

Members of the legislature have expressed interest in the potential of MEAs to lead in renewables procurement and energy efficiency programs. The Commonwealth’s ambitious Green Communities Act (2008), top energy efficiency ranking by the ACEEE, and vigorous pursuit of rooftop solar and offshore wind development create a context for the expansion of clean power procurement by Massachusetts MEAs.

Some towns are participating in, or considering, Green Municipal Aggregation programs, which are described on this page of the Mass Energy Consumers Alliance’s web site. In a nutshell, participants in Green Aggregation programs purchase Class I RECs to provide five percent (5%) more green power than required by the state’s RPS. Five percent is described as a target that supports more renewable energy on the local power grid while keeping the rate competitive with the electric utility. Some Green Aggregation programs also offer customers the option to purchase enough Class I RECs to offset 100% of their usage.

A 2018 paper on GMA from CASS CEA can be found here. This map from the report shows the current state of GMA in Massachusetts as levels of additional Class 1 content.

At the October 4, 2017 City Council meeting, the Boston City Council voted unanimously to authorize the city to adopt Community Choice Energy with the goal of significantly ramping up the consumption of renewable energy across the city. The order calls for an aggregation plan with a new default option that includes 5% more renewable energy sources than minimum state standards which currently stand at 12%, as well as an opt-in option of 100% renewable energy. About 200,000 residential accounts and 21,000 small business accounts could be in play in Boston.

The City of Newton, population ~ 80,000 is developing a plan for a new electricity program to be named Newton Power Choice. Customers will receive a standard amount of renewable electricity above the state requirement, with that amount TBD as of April, 2018. Customers can further choose to opt up to 100% renewable or down to no additional renewable. Renewable energy will come from New England-based renewable energy projects. A public hearing will be conducted at the May 16th, 2018 Massachusetts Department of Public Utilities (DPU).

Rate Spikes in NEMA (Northeast Massachusetts) have resulted in higher rates due to an increase in the cost of capacity, a large component of the cost of electricity supply. The capacity charge, determined in the Forward Capacity Market (FCM) is a reliability charge paid by retail customers to power generators. It is intended to ensure that there will be sufficient generation capacity to meet demand on the hottest and coldest days of the year. The spike in the FCM is expected to last a year or two in the NEMA load zone and will more than double in price, which represents over 30 percent of the overall supply rate. These increases have made it more difficult for some MEA’s to remain competitive in cost with IOU product, National Grid’s Basic Service, and caused one of the first GMA’s in the region, Melrose Community Energy Aggregation, to go dormant until at least late 2018.

FAST FACTS

By 2016, more than one-eighth of the state’s power was generated with renewable energy, including distributed (small scale, customer-sited) generation.

The Renewable Portfolio Standard for new (Class 1) resources is 15% by 2020, rising by 1 percentage point per year thereafter.

The Utility Restructuring Act of 1997 created the possibility of retail choice through municipal aggregation and through market aggregation. See General Law Chapter 164, Section 134.

The goal of the Green Communities Act of 2008 is to help Massachusetts cities and towns find clean energy solutions that reduce long-term energy costs and strengthen local economies. See General Law Chapter 169.